Community Transport

Thursday 10th May 2018 Westminster Hall

13:30

[Lilian Greenwood (Nottingham South) (Lab)]

I beg to move,

That this House has considered the First Report of the Transport Committee, Community Transport and the Department for Transport’s proposed consultation, HC 480, and the Government response, HC 832.

It is a great pleasure to serve under your chairmanship, Mr Davies. I thank the other members of the Transport Committee for their work on this inquiry. I am pleased to see that my hon. Friends the Members for Cambridge (Daniel Zeichner), for Easington (Grahame Morris) and for Plymouth, Sutton and Devonport (Luke Pollard), and many hon. Members from across the House, are present to debate our report.

The Transport Committee often scrutinises multibillion-pound investment in roads and railways—high-profile mega-infrastructure projects. Community transport rarely comes under the spotlight, yet it encapsulates what local transport is for: connecting people with their communities. It is vital to many thousands of users, who are often the most vulnerable in society, and it provides them with reliable, high-quality and, above all, friendly and caring local transport services.

[Nick Thomas-Symonds (Torfaen) (Lab)]

On that point, in my constituency I have a provider called Torfaen Community Transport, which is exactly as my hon. Friend says. Does she agree that, with rules and regulations, it is important to recognise the special status of community transport and the excellent services it provides?

[Lilian Greenwood]

My hon. Friend is exactly right, and I suspect I will hear from many more hon. Members who want to talk about their local providers.

On reading through the many comments on the Committee’s online forum from community transport groups, drivers, users young and old, their families and even a tea shop and bed and breakfast in the Yorkshire Dales, it is clear just how important those services are to people’s daily lives. It is noticeable how many people referred to them as a lifeline. I recommend that everyone looks at #WithoutCT on Twitter to see the range of socially valuable activities that would simply not be possible for some without a local community transport operator.

[Neil Parish (Tiverton and Honiton) (Con)]

I thank the hon. Lady for the report and for what the Transport Committee is doing on it. Community transport is important, especially in more rural areas, and especially to enable our elderly to get to hospitals all over the place. We have to try to provide some direct help with fuel costs or insurance—something that will keep those community groups going. They often cannot afford to run commercially, but they can do such a good job with some support. They do so all across my constituency, as I am sure they do across hers.

[Lilian Greenwood]

The hon. Gentleman is right that those services are invaluable. It might be a regular trip to the shops, a lift to a social or sports club, or a visit to the doctor or hospital, as he just said. It could even be something that we would all strongly advocate: a lift to the polling station on election day.

Community transport encompasses a broad range of services, whether that is lift-giving by volunteer car drivers, dial-a-ride minibuses for people with disabilities or other mobility problems, or community bus routes that would not otherwise exist because they are not commercially viable. I have seen the importance of Nottingham community transport in my area, and I am sure that we all have wonderful examples that showcase how local community transport operators serve our constituencies. That is why we support and highly value community transport, and why we want and need more of it, not less. We must not take it for granted.

A vibrant, not-for-profit community-based system is becoming increasingly important to complement existing commercial bus and taxi services, and to plug gaps in provision that are growing in many places because of pressure on local authority budgets. Last summer, however, the community transport sector faced an existential crisis. The Department proposed an about-turn in relation to not-for-profit operator licensing arrangements that could have serious, perhaps catastrophic, implications. Grave concerns were expressed by the sector, and by hon. Members across the House, which is why the Transport Committee became involved. I am proud that it was the first issue we considered after I was elected as Chair.

We heard evidence from all sides, including from the commercial operators who claim that there is unfairness in the current system, from hundreds of community organisations that feel under threat, and from the public bodies whose job it is to oversee the licensing and regulation of both sectors: the Department for Transport, the Driver and Vehicle Standards Agency and traffic commissioners. Our report was published in December and the Government responded in February, alongside the launch of their consultation on proposed changes.

My anxiety is that despite the work of our Committee and others to expose the dangers of the Department’s approach, the Government have not yet started to listen fully or engage properly with those legitimate concerns. A potential crisis has not yet been averted.

[Andrew Percy (Brigg and Goole) (Con)]

I congratulate the hon. Lady on securing the debate. Following that consultation, the portfolio holder in the East Riding of Yorkshire Council said that little had changed from the Department for Transport’s proposal, which will have devastating consequences for the sector in the East Riding of Yorkshire. Community groups such as Goole GoFar and Age UK Lindsey rely on volunteer drivers. The truth is that the Government have simply not understood what the proposals will do to that sector. They should listen to councils such as the East Riding of Yorkshire that know how it works.

[Lilian Greenwood]

I agree with the hon. Gentleman, and I hope that during this important debate, we can begin to get the assurances we need from the Minister.

The UK has taken a unique approach to community transport by legislating for a relatively light-touch, affordable regime through the section 19 and section 22 permits of the Transport Act 1985. It is widely acknowledged, including by the Government, that the regime has provided an effective framework within which not-for-profit organisations can safely provide community-based local transport services. The Government have also very broadly accepted throughout that the long-established permit regime still achieves that. Furthermore, they accept that developments in the sector that have led to the current situation have been not only supported by official guidance, but explicitly encouraged by local and central Government for many years.

Not-for-profit community organisations have been encouraged to become more professional in outlook and, in the face of growing pressure on local authority budgets, to become more financially self-sufficient. Community organisations have responded to that call by quite properly and, I stress, in accordance with the official guidance, developing their operating models to deliver services via a mix of grant funding and local authority contracts.

[Daniel Zeichner (Cambridge) (Lab)]

Does my hon. Friend agree that the changing situation in local authorities—I have seen it in Cambridgeshire—whereby mainstream services have disappeared to be replaced by not just voluntary, but professional schemes, has led to those problems?

[Lilian Greenwood]

My hon. Friend is right. Many community organisations, some very successfully, have achieved greater self-sufficiency and sustainability by cross-subsidising what can be thought of as core community transport services with income from contracts for school and social care transport, for example.

And so to the bombshell of last summer. At the end of July, in what the Department seems to have hoped would be a relatively innocuous letter from a senior official to issuers of section 19 and section 22 permits, it set out a new approach, which was contrary to the official guidance that had been applied for decades but in line with a new interpretation of EU regulation 1071/2009, which has been in force since 2011. This is the crux of the matter: there is a potential misalignment of the relevant sections of the 1985 Act and its associated guidance and practice, and EU law.

The European regulation defines three derogations from the operator and driver licensing requirements on the mainstream commercial sector: where organisations are engaged in road passenger transport services exclusively for non-commercial purposes; where they have a main occupation other than that of road passenger transport operator; and where organisations have only a minor impact on the transport market because of the short distances involved. Member states can choose whether to apply the third derogation.

The Department’s letter noted the findings of a DVSA investigation into the licensing arrangements of an individual community operator in Erewash, Derbyshire—I see the hon. Member for Erewash (Maggie Throup) is present. Essentially, that investigation, which was conducted in response to a complaint from a commercial operator, found that as the operator in question held a number of competitively tendered local authority contracts, it could not be considered to be operating for non-commercial purposes.

[Maggie Throup (Erewash) (Con)]

Is the hon. Lady aware that to date this is the only case that has been brought forward in response to this letter issued by the DFT?

[Lilian Greenwood]

Yes, the hon. Lady is right—absolutely. For years, guidance and practice in the UK had considered “not-for-profit” and “non-commercial” to be interchangeable terms. The DVSA investigation and the DFT’s letter signalled a completely new interpretation. The consequence for the operator investigated by the DVSA was that it could no longer operate on the basis of community transport permits, because—according to the new interpretation—the derogations from full public service vehicle operator and passenger carrying vehicle driver licensing did not apply.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Did the Select Committee have any chance to access any legal advice on this rather startling interpretation of this regulation, which has been interpreted in totally different ways, as the hon. Lady said, for decades? Very little policy point seems to lie behind the changes that are being proposed, and I wonder whether we are somewhat pedantically accepting a rather eccentric legal opinion that is threatening very genuine voluntary services that are quite non-profit making in many parts of the country.

[Lilian Greenwood]

The right hon. and learned Gentleman makes a very important point, and I think that it is for the Minister to explain precisely why he has taken this specific legal approach to the interpretation of the regulation. I am sure that he will do so in his response to the debate.

The DVSA told Erewash Community Transport that it must

“take action to bring its operations into line with all applicable legal requirements”,

and that that applied to all its drivers and services, not just those provided under the terms of contestable contracts. The DFT’s letter confirmed that this interpretation was now to be universally applied, and not just applied to one operator, and that it was intended to make clear the broader implications for the community transport sector. The letter acknowledged that existing guidance

“may have provided an inaccurate indication”

of the rules for sections 19 and 22 permit use. Nevertheless, all operators in similar circumstances would

“now need to take action to bring their services into compliance with legal requirements.”

The letter asserted that additional licensing requirements were likely to apply mainly to large, transport-only organisations, and that many—perhaps the majority—of other smaller and community-based permit holders were likely to be unaffected. It said that the DFT intended to explain the implications more fully and to consult on its proposals in the autumn. The evidence to our inquiry, including evidence from hundreds of community transport organisations of various types and sizes, overwhelmingly suggested that that assumption was simply wrong.

Although the DFT’s letter may have been well-intentioned and designed to clarify and calm the situation, it achieved the opposite effect, by creating widespread confusion and panic. Mobility Matters, an urgently convened campaign group, told us that its survey evidence suggested that the new requirements were likely to be catastrophic for many community organisations, with 40% saying that they would be unable to carry on operating as a result of the additional costs.

There were many unanswered questions and the broad community transport sector was understandably confused about what action was required and by what date.

[Mr Bob Seely (Isle of Wight) (Con)]

I thank the hon. Lady for calling this debate. On the Isle of Wight, we have the excellent FYTbus service—the Freshwater, Yarmouth and Totland service. It is very successful and needs no further help. This heavy-handed and bizarre approach to regulation puts a question mark over the future of the FYTbus service, and I think that that is very unnecessary. Does she agree that we need to be encouraging voluntary drivers and the community sector, and not hitting them in this way?

[Lilian Greenwood]

That is precisely right and my Committee called on the Government not to use a sledgehammer to crack a nut.

After the DFT’s letter arrived, traffic commissioners and local authorities were also unclear about its immediate implications. We heard about traffic commissioners sitting on applications for new permits, because they were unsure what to do. We heard about local authorities holding off from agreeing new contracts and that some contracts with permit-holders had already been terminated. Concern was growing that vital and socially valuable services might already be being lost. Frankly, it all seemed to be a total mess and the sector felt in limbo.

The pressure from our inquiry, from the Community Transport Association and from campaign groups such as Mobility Matters perhaps hastened the DFT’s attempt to clarify the situation. On 9 November last year, it issued a letter to local authorities, making it clear that at that stage no contracts should be cancelled. On the face of it, that letter also seemed to offer some of the clarifications that were being sought. For example, it explained that services could be considered “non-commercial” where there was demonstrably no commercial market—that is, where a community organisation had stepped in to replace a failed commercial bus route, or where it was delivering a service for which no commercial operator had tendered. Essentially, it set out a potentially broader definition of “non-commercial” and seemed to address some of the more obviously perverse consequences of the initial statement. We therefore welcomed the clarifications as a starting point from which to find a more workable solution.

However, we also concluded that the fact that it had taken more than three months to produce that letter demonstrated the Department’s lack of understanding of the sector and the potential impacts of the July proposals. What we wanted, and what we recommended in our report, was for the Government to use their consultation to consider reforms designed not only to achieve compatibility with the EU regulation but to maintain achievement of the key public policy objective— the provision of high-quality, safe and secure community transport services for people who might otherwise be left isolated.

I was not reassured by the Government’s response to our report. It took precisely the legalistic position that we had warned against, and discounted almost all of our recommendations, which were intended to lessen the impacts of the proposals. It did not consider the interplay with commissioning bodies’ responsibilities under the Public Services (Social Value) Act 2012, despite indisputable evidence of the immense social benefits of community transport. In addition, it did not consider establishing any kind of hybrid category, whereby there would be more proportionate licensing requirements for the sector. It could not even set out an appropriate and clearly defined transition period for affected organisations and there was no commitment to offer tangible support to those required to make changes.

It concerns me greatly that the Department has offered no properly reasoned justification for its implacable stance. Given the importance of what is at stake, it is surely incumbent on the Government to explain their thinking. The comments that I am hearing about the consultation, which closed last week, are not encouraging either. The fundamental questions of whether the Government’s interpretation of the EU regulation is correct, whether their proposals will achieve what they set out to achieve and whether those proposals are proportionate and workable have not been adequately open to challenge. It amounts to a consultation in name only; the Government’s proposals are presented largely as a done deal.

Mobility Matters’ opinion, with which I have sympathy, is that the interpretation is arguably wrong. Mobility Matters asserts that the definition of “non-commercial purposes” should be applied to organisations and not only to the services that they provide. For example, it should take account of an organisation’s charitable status and the social value that it brings to its local community. Mobility Matters also points out that the issue at hand is about fairness in competition for contracts. If that is the case, logic would suggest that the issue should be dealt with in procurement guidance.

The Minister needs to demonstrate today that the Department has properly engaged with these arguments and properly considered alternative courses of action. However, the Department seems intent on pushing ahead with more stringent, more expensive licensing requirements, without knowing how many operators will be affected and how much this will cost them, or how many operators will be able to bear the strain. There is a real danger that the Government have massively underestimated the detrimental effects on the community transport sector. That is demonstrated by the initial impact assessment, which was published alongside the Government’s consultation paper and which, frankly, is woefully inadequate. First, it is dated “October 2016”, when we know, by the Department’s own admission, that as recently as last July it did not have a reliable picture of the size or shape of the community transport sector.

Secondly, in the absence of reliable data, the Department seems to have grossly underestimated the total net costs for affected operators, putting it at £69.5 million over 10 years. The Community Transport Association, the trade body set up to support community operators, with the assistance of the Department, puts the figure at nearly £400 million. The Department’s assessment did not monetise substantial costs, including the costs of tachographs, additional insurance, company registration for those needing corporate restructure, and funding required to prove financial standing for PSV operator licences.

The Department’s estimate was that 1,567 permit-holders would be affected by the operator or driver licensing requirements, which is 25% of permit-based operators. The CTA’s analysis is that 95% of permit-based operators will be affected, which is a total of 5,956 operators. Just today, I received the latest example of the wider impact. Keep Mobile is an operator with 14 paid drivers, three volunteer drivers and 12 minibuses providing services around Berkshire, primarily to vulnerable passengers. Last year, the Prime Minister visited to celebrate its 25th year of operation. However, as a result of the confusion created by the Department’s letters, a local authority contract was not renewed and Keep Mobile was forced to make four members of staff redundant and sell two of its vehicles. Now it fears it will have no alternative but to close down. These impacts are real and devastating.

With such a level of uncertainty about the effects of the proposed changes, it is surely incumbent on the Department to take stock, to reconsider or, at the very least, to proceed with extreme caution, and I hope the Minister will be able to assure us that that is the approach he is taking. The published impact assessment is no basis on which to proceed. Frankly, the Department has this back to front: it is announcing its policy without a clear view of the impact that it will have. When will a fuller, more robust impact assessment be published? Is he ready to rethink his plans in the light of that new data?

Will the Minister consider how we got to this point? The Transport Committee concluded that the Department failed to address valid concerns over many years. It acted too slowly. Perhaps now it feels it has painted itself into a legal corner, but why has that happened? As I understand it, complaints about the widely accepted permit system have emanated solely from Martin Allen and his small group of commercial operators, the Bus and Coach Association. The main trade body, the Confederation of Passenger Transport, seemed intensely relaxed about permit use in its evidence to our Committee. Why did the DFT allow the complaints of a small group of commercial operators to rumble on for years? If it had addressed these relatively localised complaints years ago, could we have avoided the current situation? Why could localised problems in relation to competition for local authority contracts not be dealt with through procurement guidance? Why the need for a new, blanket approach to operator and driver licensing when we all accept that the permit system has worked effectively for decades and very broadly still does?

Martin Allen and the BCA say they want an end to unfair competition, but is there not a very real danger that they will succeed in eliminating all competition from community transport operators? Has the Department for Transport and the European Commission effectively been bullied into proposals that could do immense harm to vital community services and achieve precisely the opposite of the regulations’ intention?

[Mr Seely]

The whole point about voluntary bus services, such as the FYTBus and others that we are here to defend, is that they take up the slack where there is no commercial option because the commercial bus operators will not provide services in those areas. That is the whole purpose and logic of having voluntary services.

[Lilian Greenwood]

The hon. Gentleman is right. In many places community transport operators are filling gaps. In other places, they are providing local authorities with an affordable option to continue providing services to their communities.

As we emphasised in our report, the community transport sector has acted in good faith, in accordance with official guidance and with the acquiescence and encouragement of local and central Government over many years. The Minister must confirm today that he will take full account of the views and concerns expressed during the consultation. He must be clear about the next steps and the timetable for change. I would like to hear him talk about transitional arrangements, financial support and other mitigations. We have heard precious little about them so far. It would be unjust if even one socially valuable community transport service was lost in these circumstances. I fear the ultimate outcome, if the Government pushes ahead regardless of the concerns, could be far worse.

[Philip Davies (in the Chair)]

I ask everyone who wants to speak to stand, so I can assess how many Members we have to squeeze in. To try to get everyone in, I will have to set a time limit to start with of three minutes.

13:53

[Peter Aldous (Waveney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this debate and on her Select Committee’s work in scrutinising the impact of the changes. It is right that this debate is taking place now, just after the Government have closed their consultation on the use of section 19 and section 22 permits.

I want to pass on the concerns that two community organisations in my constituency, Bungay Area Community Transport and Halesworth Area Community Transport, have raised with me. There are five issues I will draw attention to. The first is the disproportionate impact on smaller operators. BACT and HACT have advised me that should the proposals go through, they will have to close.

My second point—the hon. Lady did refer to this—is that community transport generally complements, rather than competes with, commercial operators. BACT and HACT have made that point to me. There is a view that the Government are responding to the prompting of a small number of vocal commercial operators that are not representative of the commercial sector as a whole.

My third point is that there is a risk of a domino effect. If one service is closed, it can cascade all the way down through local economies, with redundancies, staff reductions, day centres closing, market towns having even more problems and banks having yet another excuse to close their branches.

My fourth point is that local and national Government have supported the sector for decades, and there is a very good reason for that: it is the best way of plugging this particular hole and meeting this existing demand. If the changes go through, I fear that Government will just have to come up with an alternative arrangement, in effect reinventing the wheel.

My final point is about the social and community role that these organisations provide. I will give one example that BACT brought to my attention. Mr and Mrs X are both disabled with walking difficulties, and Mr X has Parkinson’s. They live in a remote rural village and have no family close by. They make use of BACT’s car service for medical appointments, its dial-a-ride service to get them to the shops and its rural bus service once a week to get to the market town. They would be totally isolated without BACT, and they would probably be forced to leave their family home. In that context, I ask the Government to pause, go back and review the system, which has operated in this country—it is a British way of doing things—and should be allowed to continue.

13:57

[Sir Vince Cable (Twickenham) (LD)]

I strongly endorse the comments of the Chair of the Select Committee, the hon. Member for Nottingham South (Lilian Greenwood), on the potentially enormous impact of these retrograde and unnecessary changes, which will affect hundreds of thousands of people with mobility difficulties.

I should start by declaring an interest. Eighteen months ago, I took on the role of chair of the HCT Group, which I think is the UK’s largest social enterprise. It runs a large number of buses, but also a large number of community transport operations. It is not affected by the changes, because its drivers are already fully compliant with the new standards, but it has deep knowledge of the industry and totally shares the assessment of the Community Transport Association that the changes will do truly enormous damage.

I mention HCT at the outset because it is a social enterprise, and I get a strong sense that the Department simply does not understand the concept of a social enterprise. It seems to believe that a commercial service has to be provided by a commercial operator, but very efficient commercial services are provided by social enterprises that operate efficiently, but make a different use of their profit. The profit is used for a social purpose, not the reward of shareholders, and that distinction appears to be completely ignored in the Department’s evaluation.

I will make two specific points. The first relates to the social impact assessment. Frankly, the Department has done a shoddy piece of work. As the Chair of the Select Committee points out, some fundamental costs are completely ignored. The transport management cost in the industry is underestimated by a factor of three. Most seriously of all, there is a well-developed methodology that people in the industry understand for calculating social impacts. Those are not fully taken into account. The figure of £400 million that the Chair of the Select Committee mentioned is well attested by the people who use the standard methodology.

My second point is on the legal issues. It appears that in every other sector of the economy—local or national—there is now an understanding that the Public Services (Social Value) Act 2012 can be applied on top of procurement rules, but an exception has been made in this case. What has happened here—it has happened many times in the past over procurement issues—is that officials and lawyers are over-interpreting European Union laws. I encountered that in Government as a Secretary of State, dealing with the Department for Transport over the procurement of railways. Fortunately, the then Secretary of State for Transport—now the Chancellor—listened, changed it, and we had a much more pragmatic approach. We are asking today for a much more practical, pragmatic response, which recognises the real social need in the sector.

14:00

[Sir Patrick McLoughlin (Derbyshire Dales) (Con)]

I will make two distinct points, because of the pressure from the amount of people who want to speak. I understand why the Minister felt he had to do this, but I hope that after listening to the debate—to the words of the Chair of the Select Committee, the hon. Member for Nottingham South (Lilian Greenwood), and the leader of the Liberals, the right hon. Member for Twickenham (Sir Vince Cable)—he takes on board the very strong feelings, across parties, on this issue.

I first tabled a private Member’s Bill to get bus-fuel duty rebate for community transport back in 1999, because before then the sector was not getting the same kind of rebate as the commercial sector, and I thought that was unfair. When I introduced that private Member’s Bill, the Government prevented it from going any further, but in due course they did bring in a BSOG—bus service operators grant—arrangement for community transport.

When I was Secretary of State for Transport I was fortunate enough to set up a scheme to help the smaller community transport agencies to get new buses. They fulfil a vital role, particularly in rural areas, but also in wider urban areas. I have three community transport agencies in my constituency. To give some idea of the work that Bakewell and Eyam Community Transport did over the past year, it has told me:

“Over the last 12 months we transported over 86,000 passengers which included 8270 wheelchair users and 3525 health related journeys”.

The agency served more than 397 groups, including Age UK, the scouts, Church groups and Women’s Institutes—the list goes on. Bakewell and Eyam Community Transport fulfils a very important role in rural areas.

I am concerned that the proposals have made a number of charitable organisations unnecessarily concerned that they will not be able to continue that work. I would like to see more flexibility. The Minister needs to reflect on the debate, as I am sure he will, and look at what he can do to assist community transport.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

As my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said, this is just a matter of law. The new regulation is either a correct implementation of European Union law, or it is not. Which is it?

[Sir Patrick McLoughlin]

I will leave that to the Minister to answer; I am sure he will want to answer that. I fear that this issue has been around for some time. It is obviously everybody’s view, including that of other speakers, that the Government have gone too far in responding to what was European Union regulation. After all, the Government believe in deregulating, not excessive regulation. Perhaps the Minister would like to tell us about all the regulations he will get rid of, because for every regulation he introduces he is supposed to get rid of two.

As we can see, the proposals would lead to a lot of extra regulations that should not be introduced. I hope that the Minister takes note of the debate, and comes forward with a solution that allows community transport to carry on doing the vital job it has done, and that removes the question mark that many community transport agencies feel hangs over them at the moment.

14:04

[Grahame Morris (Easington) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I thank my hon. Friend the Member for Nottingham South (Lilian Greenwood), the Chair of the Select Committee, for summarising a powerful case, which many Members across the House support. I also thank community transport providers operating in my constituency of Easington. In particular, I thank Angela Kent, the operations manager of East Durham Community Transport, who kindly contacted me and briefed me in advance of today’s debate.

As has been pointed out, community transport is a vital lifeline for many people, especially elderly and vulnerable people at risk of social isolation and exclusion. My constituency is semi-rural, and the quality of local bus services for many people is nothing short of lamentable. If commuters in London had to put up with the quality of public transport services operating in my constituency, there would be protests on the streets. The regulated, integrated, frequent and modern public transport network that is standard for the capital city is a million miles removed from the experience of my constituents. Communities such as South Hetton, Haswell, Haswell Plough, Hesleden, High Hesleden and Hutton Henry can be left isolated, with an infrequent, sub-standard bus service that does not operate in the evenings.

[Ben Lake (Ceredigion) (PC)]

Does the hon. Gentleman share my concern that the impact assessments conducted by the Department for Transport underestimate the impact of the proposals on very vulnerable people? The impact assessments led us to believe that the impact would be minimal.

[Grahame Morris]

That is a really important point; I thank the hon. Gentleman for that intervention. The problem is that, as a consequence of the regulations, people will be denied access to local amenities, leisure facilities and employment opportunities. My hon. Friend the Member for Nottingham South indicated the cost—some £400 million.

People are rightly angry and frustrated about the implications of the changes. I am angry about the quality of the transport infrastructure in my constituency, and this will simply compound that. The proposed guidance from the Government implies that community transport providers need to show that they are not blocking commercial operators that may wish to deliver a local service on a particular route—the section 19 and 22 recommendations that have been mentioned. However, community transport is plugging the gaps of a failing commercial network. The ongoing withdrawal of commercial bus services means that the community transport sector as a whole has gained growing importance in filling transport gaps, particularly in largely rural areas such as mine. Many voluntary transport services are financially fragile, and rely on donations and the goodwill of volunteers to continue.

The Government must realise that community transport is about so much more than simply moving people from A to B. It brings people together, teaches people new skills, makes disabled and elderly people in rural areas less socially isolated, improves physical and mental health, and makes communities pull together to tackle many issues that they face on a daily basis.

I share the reservations of community transport providers in my constituency that the Department for Transport, sitting in splendid isolation in offices in central London, may find it difficult to comprehend the service and support provided by community transport. I share the view of my hon. Friend the Member for Nottingham South that the narrow and legalistic approach that the Government are adopting to community transport is like using a sledgehammer to crack a nut.

14:08

[Maggie Throup (Erewash) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I, too, congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing the debate.

As I reflected when I led a Westminster Hall debate on this issue back in December 2015, community transport occupies a unique central ground between the passenger transport industry and the voluntary sector, providing innovative solutions to the otherwise unmet transport needs of local residents. Figures suggest that Erewash Community Transport alone generates £1.3 million of social value for the communities in which it operates. We all agree on the importance of these types of transport services run for and by our community, so the changes made to the guidance with regard to section 19 and 22 permit holding organisations are particularly concerning.

The problem appears to have arisen as an unintended consequence of what is, in my opinion, poor EU regulation, rather than any specific action taken by Her Majesty’s Government. Where operators such as Erewash Community Transport are affected, Ministers have announced that they are making £250,000 available to help to fund advice for those drivers requiring a public service vehicle licence. Ministers have also issued new guidance to the Driver and Vehicle Standards Agency to ensure that a proportionate approach is taken to enforcement for operators who demonstrate that they are working towards that compliance. I accept that this situation is far from ideal, but from conversations that I have had with the Minister, it is evident that the Government are doing everything they can within the scope of the law to mitigate this issue.

As part of the Select Committee’s evidence-gathering process, it heard oral evidence from the chair of Erewash Community Transport, Mr Frank Phillips. Although I cannot say that Frank and I always see eye to eye on everything, as he also serves as a local Labour councillor, we have a shared passion for the community transport sector and agree with members of the Transport Committee that the social value of what these organisations do in providing essential community-based transport services to vulnerable people who would otherwise suffer isolation is paramount. I am confident that the Minister shares that view and would urge him to continue in his efforts to negate the negative impact of the revised directive and to look at what further steps his Department can take to ensure the continued success of a sector that benefits my constituents in Erewash, as well as the wider community as a whole.

14:10

[Stephen Pound (Ealing North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I must admit that I always associate you more with a column in the Yorkshire Post than a pillar of the establishment, but it is a pleasure to be here today.

I congratulate the Chair of the Transport Committee, my hon. Friend the Member for Nottingham South (Lilian Greenwood), on what is a model of a good Select Committee report. It is investigative and thorough. It has called witnesses, including the Minister and Mr Phillips and Mr Allen, who have been mentioned. Above all, it has focused on the core problem—that there are two sections of the 1985 Act, which can be addressed.

Surely if the Government cannot make things better, they should at least endeavour not to make things worse. The extraordinary thing about the community transport model that we have in this country is that it is organic. It has grown and it did so—as a politician, it seems almost heretical for me to suggest such a thing—without our hand on the tiller. It grew organically from the community and has brought added value and so many different beneficial advantages.

We have not yet mentioned the volunteers. My hon. Friend the Member for Ealing, Southall (Mr Sharma) was a volunteer driver with the magnificent Ealing Community Transport, which my hon. Friend the Member for Nottingham South has visited—that was the high point of our career there. I should say Ealing Community Transport is the exemplar; the finest example; the industry standard; the diamond mark of community transport. It has volunteers and also takes people on as apprentices. My hon. Friend the Member for Ealing Central and Acton (Dr Huq) has also visited it on many occasions.

There are many other factors that we simply do not have time to adumbrate today. There is the issue of cross-subsidy—we can cross-subsidise other beneficial community activities. There is also the fact that it can be an early-warning system. Very often, the drivers will identify a potential problem with somebody they are travelling with, and that is an early-warning system.

The absolute core of today’s debate is that there is no comparator between commercial bus and transport organisations and the community transport sector. They are totally different beasts. The community transport sector should be nourished, cherished, respected and admired. I have no argument whatsoever with the commercial transport sector, but it has its end of the pitch and the community transport sector has its end. Let us allow for something that works, and which, in my part of the world, provides transport for police volunteers, cadets and so on and knits all those community groups together in a way that frankly were it to cease to operate would leave a dark and terrible vacuum in the heart of Ealing. I know you would not want to see that, Mr Davies. I am sure the Minister would agree.

14:13

[Alex Chalk (Cheltenham) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. In the short time available, I will make some brief points. Firstly, the implications of these changes for my community in Cheltenham are very significant. The hon. Member for Ealing North (Stephen Pound) just referred to volunteers, and Community Connexions in my constituency has 50. It makes 100,000 passenger journeys a year, with 13,000 passenger trips to day centres and 5,000 trips to health appointments. As one example, we have a fantastic facility near Cheltenham called the Butterfly Garden, which provides education, therapy and recreation for people with disabilities, and the commercial providers simply do not want a contract to serve that fantastic facility.

If I may say so, from this side of the fence, is this not paradigmatic of David Cameron’s big society? It is about using corporate receipts to maximise community benefit. [Interruption.] I knew that would rile up Opposition Members, but it is true. We should be doing everything possible and straining every sinew to support these fantastic organisations.

In my constituency, Community Connexions is now having to consider winding up the organisation because of the cost of getting an operator’s licence—some £26,000. It does not know whether its application to get a licence will then be challenged by the Bus and Coach Association or whether commercial operators will pursue loss leaders to try to drive them out of business.

In its briefing for this debate, the Community Transport Association said, quite fairly:

“We understand that this action does not result from policy decision within government, and our sense is that they would rather not be doing this.”

That is fair and right. We have to recognise, as has already been indicated, that the issue derives from an EU regulation from 2009 that came into force in 2011. Therefore, the implication of the Government’s position must be that we have collectively misinterpreted the law during that time, which leads me to think that the law is moot—it is arguable.

The question about what non-commercial purposes means must be a matter for legitimate legal debate. Should it cover the organisation, as has already been intimated, or simply the specific contract? We are a nation of laws and we comply with the law—that is one of the most solemn undertakings of any British Government— but where the law is arguable, there is a duty on those community providers who do so much good in our society and in our constituencies to take up those arguments, to deploy them to the fullest extent and, if necessary, to litigate and test them. It is only where the case is unanswerable that we should be taking the necessary action.

[Mr Kenneth Clarke]

Would my hon. Friend agree that it is not unknown for Governments to gold-plate European regulations and that, quite often, that is at the instigation of commercial organisations, which do not have terribly strong objections to costs and burdens being placed on rivals? Does he not think that the Department’s interpretation of this regulation being applied, for example, to non-profit-making organisations with unpaid voluntary drivers, providing services that no commercial operator is actually trying to get, should be seriously questioned by the Minister? Perhaps he should challenge the rather pedantic nature of the legal advice that he has received.

[Alex Chalk]

As always, my right hon. and learned Friend presents the point extremely powerfully. My concern is that it is not so much about gold-plating the EU regulation as it is about being excessively cautious in its interpretation. There is a role here for the Government to take a robust line. With any litigation there is the risk of failure and I recognise that, but there is an overwhelming public interest and, just as importantly, a powerful and legitimate legal argument for taking this on, and I would urge the Government to do so.

14:17

[Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)]

As a member of the Transport Committee, I have already had my say in this report, so I will be brief. Community transport is a vital lifeline for people in the far south-west, both in rural areas across Devon and Cornwall and in big cities such as Plymouth and Exeter. In my own patch, Access Plymouth has been in touch. It is a superb community transport provider that is very concerned about these changes.

My concerns were echoed in the report. The Transport Committee set out some very clear concerns about section 19 and 22 permits, highlighted the fact that the decisions taken by the DFT may have been taken with best interests in mind, but have been done so in a haphazard way. The Committee set out a very clear set of recommendations that the Government should follow in order to mitigate these circumstances. I am very disappointed that that has not happened. The DFT’s management of the sector has been confused and needs proper clarification. I hoped that the Committee’s report would provide the basis for that clarification of the rationale, so I hope this debate will help give new energy to Ministers.

Local authorities are now following very different rules. They are confused and are making very different decisions, which are disadvantaging not only community transport providers but the communities that rely on them. Our recommendations were clear but have not been followed and the changes have now been enacted very differently by local authority providers across the country and by different community transport providers, which are trying to interpret a very complex legal structure in a way they have not before.

The timing of our Transport Committee report was deliberate. Concerns were raised, the Committee communicated them clearly, and the DFT had the window to correct the problem before long-term damage was caused to the community transport sector. I fear that the window of opportunity has now closed. The consequences of the DFT’s inaction is that community transport providers are shedding volunteers and vehicles, and are reducing the service they offer to some of the most vulnerable people in the country, including disabled and elderly people, who desperately need community transport provision to help them get around their communities.

There is a real risk that, unless the Government act, the confusion caused by the DFT’s action could sound the death knell for community transport as it is structured. I ask the Minister please to re-read the Transport Committee’s recommendations, listen to the experience of community transport providers, and act swiftly before any more damage is done to the sector.

13:15

[Edward Argar (Charnwood) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on her Committee’s report and on her excellent speech. There is a reason why the Transport Act 1985 set out a reasonable but relatively light-touch regulatory regime for community transport services, which, as hon. Members have made clear, provide services to address a commercially unmet need in our communities. They get people to hospital, GP appointments and the shops, and they generally help people to live a normal, active life by taking them from door to door with a caring, local service.

In my semi-rural constituency of Charnwood, the Syston and District Volunteer Centre, which provides volunteer drivers in cars and minibuses, plays a huge role in supporting the community. It is well run and financially in a good place, but there is the risk that what is proposed in the consultation could unintentionally harm it.

My very real concern is that successive Governments over many decades, having not incrementally tweaked the regulations in the 1985 Act where necessary, have led us to a place where, under legal pressure, the Government have to consult on some remedial measures and risk adopting a legalistic and potentially unduly onerous interpretation of the regulations. As the hon. Lady said, it is very much a sledgehammer to crack a nut. In seeking to address the issue of legal compliance, they might unintentionally have a much wider-ranging impact on this hugely valued sector.

As my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) highlighted, the legal point—the definition and interpretation of “non-commercial”—is important. Getting the right legal advice is important. With two lawyers in the Chamber—with all due respect to my right hon. and learned Friend and his colleagues—we may well get at least three, if not four, legal opinions. My hon. Friend the Member for Cheltenham (Alex Chalk) was right that this should be tested in the court.

I echo my right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin)—as a former Secretary of State, he has probably forgotten more about this issue than any of us in this Chamber will ever know about it—in urging the Minister, who is a reasonable and decent man, to reflect again on the proposal, to show flexibility and pragmatism in his approach, and to ensure that the consultation looks not just at delivering a legal fix but at addressing the broader policy context and delivering a vibrant community transport sector for the future.

14:23

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate my hon. Friend the Member for Nottingham South (Lilian Greenwood) on her report, her speech and her excellent stewardship of the Transport Committee.

Community transport is not the sexiest subject on the political agenda. It was never in “The West Wing”. When people think about transport, they think of things such as Crossrail, HS2 and the third runway—all of which are in my constituency, I have to say. However, as many hon. Members have pointed out, community transport gives people a lifeline.

My hon. Friend the Member for Ealing North (Stephen Pound) described Ealing community transport at length, and he has nicked most of my speech. He and I were both at the Christmas party of Age Link, which provides a similar service: volunteer drivers in their own cars, not minibuses, take isolated and lonely elderly people to appointments. In Ealing, we also have Dial-a-Ride—Transport for London is the main provider—which is another door-to-door service, with red buses.

The distinctive green and yellow ECT buses, which my hon. Friend described, are testament to how things work in Ealing and elsewhere in the country, and they illustrate why changing these regulations is so dangerous. I spent a recent Friday with ECT, and we picked up a lady called Suzie. Hon. Members have talked about their rural seats, but even in suburban Acton we picked up someone who had had a fall and has been unable to drive since then, and we took her to Morrisons. She said that the service is a godsend. It has been going for nearly 40 years and serves 298 groups—not just the elderly and disabled, but various scout groups, youth groups and every complexion of religious group from the Jehovah’s Witnesses to various mosques. ECT provides services that are not available in the commercial transport sector, and not just to the elderly—a group we seem to have been addressing today. In my list of groups I have written the YMCA, which has “young” in it. ECT serves young groups, old groups, Dementia Concern, Age Concern—those sorts of people.

These services save our local authorities a huge amount of money in avoided health and social care costs, which is the biggest bill for all local authorities at the moment. In the long run, they save us money. In January, the Government introduced a Minister for loneliness. Community transport providers tap into the loneliness agenda. There are also quantifiable figures: Deloitte estimates that the loneliness bill is £1.3 billion to £2.9 billion for the whole country. It is £10 million for Ealing alone, but with community transport it comes down to £4 million a year.

We have heard about the strangulating definition of European regulations. My hon. Friend the Member for Nottingham South described how the 1985 light-touch regulation turned into the scary notifications of 31 July and 9 November, so I will not go into all that—

[Philip Davies (in the Chair)]

Order.

14:26

[Robert Courts (Witney) (Con)]

It is a pleasure to serve under your chairmanship, Mr Davies. I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on securing this important and extremely timely debate.

I declare an interest: I am the chairman of the all-party group on community transport, which is backed and whose secretariat is provided by the Community Transport Association. Many hon. Members here are members; those who are not are very welcome to join. This is far more important than simply a parliamentary matter. In my constituency, I have four excellent community service providers—Our Bus Bartons, West Oxfordshire Community Transport, Volunteer Link-Up and the Villager—and they are all thriving. Only last week, I opened a new bus as it was handed over to the Villager service. Those services are all terrified about the impact of the Department’s proposed actions under the consultation.

I am very grateful to the Minister, who is very interested in this area. He has visited Our Bus Bartons with me, listened in person to the concerns and spent a great deal of time listening to my volunteers in person. I know he is concerned about this issue and he is doing his best, but there is an extraordinary problem here. The reason why all those volunteer-led services exist is that commercial providers have withdrawn. Is it not an extraordinary perversity that, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) said, under pressure from commercial providers, which do not want to operate in these areas, it may be difficult or impossible for such volunteer-led services to run?

We have heard some excellent speeches today. I just want to mention a couple of the comments made by my hon. Friend the Member for Cheltenham (Alex Chalk) and my right hon. and learned Friend the Member for Rushcliffe. I apologise to my hon. Friend the Member for Charnwood (Edward Argar), but there are in fact three barristers here.

[Edward Argar]

We will get six opinions!

[Robert Courts]

My hon. Friend says we will get six opinions—I am sorry all the barristers are agreeing with each other.

My hon. Friend the Member for Cheltenham is absolutely right that there is clearly space for interpreting the law here, and that is exactly what we have to do. The sections 19 and 22 system, which has existed for so long, is a classically British compromise. It has created a benign environment under which community transport can operate. It is essential that we continue to go through the regulation and the law with a fine-toothed comb. Simply put, we cannot allow a situation to arise in which community transport providers are not able to operate.

[Layla Moran (Oxford West and Abingdon) (LD)]

Will the hon. Gentleman join me in thanking all the groups across our county that do this, and especially Christopher Gowers from Wolvercote? Many of them cross our constituency boundaries, because our communities are interwoven.

[Robert Courts]

The hon. Lady is absolutely right. I mentioned Our Bus Bartons, which from my constituency runs a service to not only the Banbury constituency but Oxford Parkway railway station. It provides vital links, not just to stations but to doctors’ surgeries, for people to go shopping or for young people to go to work. The impact and essential value of the services simply cannot be overstated. She made that point very clear.

I, too, thank all the volunteers, without whom the services would not run. They put an incredible amount of effort into ensuring that when commercial services were withdrawn, communities could step in and fill the breach. We must make sure that that can continue to happen.

Rural isolation is a real challenge for any of us who represent a rural area, and I know that the Government are combating it and worried about it. That is another essential reason for community transport to continue.

I gave a full response to the consultation, in which I made some of the more technical points that I do not have time to make now. I urge the Minister to engage with the all-party parliamentary group and all of us, because we want to help. We must find a way through to ensure that community transport can continue to thrive, as it has done so far.

14:30

[Tommy Sheppard (Edinburgh East) (SNP)]

It is a pleasure to serve under your chairship, Mr Davies. On behalf of the third party, I associate myself and my colleagues with the Transport Committee presentation and the speech of its Chair, the hon. Member for Nottingham South (Lilian Greenwood), in support of the general thrust of our discussion today.

We cannot overstate the gratitude that we should express to the many hundreds of organisations throughout the country that provide a community transport service and, in particular, to the many thousands of volunteers who are involved in the boards of the charities, running the services and, often, sitting at the wheel to provide the service itself. Such people are the dedicated community heroes whom we should be lauding, saluting and encouraging. I suggest that the role of Government is to nurture, enable and give support to people who want to provide that service in their community, so I regret that we seem to have got ourselves into a situation in which this Department for Transport consultation exercise leaves many of those people devalued and in many ways frightened about the future of the service in which they are engaged.

In my own city of Edinburgh, we have a very good community transport service. There are five main providers operating in a public sector partnership with the local authority. In my constituency, the South Edinburgh Amenities Group and Lothian Community Transport Services provide an excellent service, which is not just a matter of transporting people from A to B. The whole nature of the service, and the rationale behind it, is that it provides a vital social and caring service to those people in our community who need it. We cannot overstate the importance of the service in preventing and overcoming the social isolation that many people would otherwise feel. The service is vital not just in providing material and physical help to people, but in allowing them to live their lives more fully and better than would otherwise be the case.

Community transport is a service provided at an individual level, and it gets to the places that normal transport does not or cannot reach. Quite often, that involves getting people not only to the door but through the door, with physical assistance for people to get into vehicles—something that normal operators simply could not provide.

I am very disturbed about the process that is under way. There is some confused thinking going on, particularly in the attempt to redefine, after all these years, the notion of the word “commercial”. To suggest that simply by virtue of the fact that money is paid to a service—irrespective of who is paying it and who is receiving it—an operation is rendered commercial seems to me to turn on its head what most normal, right-thinking people believe to be a commercial operation. A commercial operation, for most people, is one in which an operator engages in supplying a service in order to make a profit. That is the normal meaning of “commercial”. Organisations that do that explicitly not for profit should not be regarded as commercial, and they should be exempted from the requirements of sections 19 and 22 on that basis alone.

Even more bizarre is the suggestion that it will be for a private operator to decide whether we apply the exemption—only when a private operator says that it might be interested in running the service will the community transport operator be obliged to go into the new licensing regime. I find that bizarre. We could have a situation in which, on the one hand, a community transport operator is regarded as commercial simply because it receives payment from the local authority or someone else for providing the service and, on the other hand, it could be exempted and be non-commercial on the grounds of there being no private sector interest. At one and the same time, the operator could be both commercial and non-commercial. That is a policy of which Schrodinger would be proud, but it ought to have no part in the planning of public transport.

We must also understand the effect. If the proposal goes ahead, many community transport operators will be faced with higher costs as they try to fit in with a licensing regime that they did not have previously. More importantly, a lot of the volunteers who run such organisations will simply say, “This isn’t why we got into this. We didn’t go into it to be a commercial operator or to operate on this basis”, and they will simply give up. We will see a collapse in community transport organisation providers, and that will leave a gap in the service, driving up the cost to the local authority or anyone else who needs to provide the service.

[Stephen Pound]

Many volunteer drivers would be extremely put off by having to undergo all the onerous training to get the additional certification. Many people will simply walk away if they are required to get all that additional certification. Does the hon. Gentleman agree?

[Tommy Sheppard]

I could not agree more. That is another reason for that effect of the policy—if we oblige community transport operators to jump through the new hoops and the red tape, many people will simply say, “Well, that’s not what I want to do. I want to serve my community. I don’t want to do this.” The Department ought to be responsive to that.

I have a couple of final observations. First, I cannot be the only person to find it bizarre that the suggested rationale for why this is happening now is a sudden desire by some officials in the Department to comply better with the regulations of the European Union. We are, after all, only 47 weeks away from being led out of the European Union by this Government, whereby they hope to free themselves from the shackles imposed on them by just such European Union regulations and many others. Why the sudden outbreak of Europhilia, at the 11th hour of our membership of the European Union? It does not add up. It is probably a smokescreen for some other agenda going on in the Department.

Secondly—I know I am the only Scottish MP present—as I researched for the debate and read around the issue, I have to confess that I realised that the situation in my city is bizarre. The roads along which the community minibus travels are regulated and paid for by the Scottish Government; the people inside the bus are being taken to health and social care facilities that are regulated and legislated for by the Scottish Government; and yet the Scottish Government have no oversight of whether the operator should have a licence to drive the bus. That seems to me to be something of an inadequacy in the devolution settlement. I hope that next time we review the competencies of the devolved Administrations we consider some more joined-up thinking in that regard, so that the settlement is at least internally consistent, and all aspects of public policy can be integrated.

I have attended many of these Westminster Hall debates and usually they are much more collegiate than exchanges in the main Chamber. However, I do not think I have yet seen one in which there is this degree of unanimity in the views expressed by Members right across the House. The Minister is an admirable fellow, and I know that his fingerprints are not on this particular consultation. He now has a golden opportunity to rein in his Department, to say “Stop!” to whoever is driving this policy, and to recognise in public policy and Government action the importance and uniqueness of community transport providers the length and breadth of this country.

14:29

[Matt Rodda (Reading East) (Lab)]

It is a pleasure to see you in the Chair, Mr Davies.

I pay tribute to my hon. Friend the Member for Nottingham South (Lilian Greenwood) and I congratulate her on securing this important debate and on her excellent speech outlining the issue. Her knowledge and expertise on all transport matters is of great benefit to the House, and I commend her work as Chair of the Transport Committee in carrying out this important and thorough inquiry. I also thank hon. Members from across the House for their contributions.

We have heard that community transport is a very broad term for the vital local transport services that provide a lifeline to people in our communities who, sadly, might otherwise be isolated. From lifts by volunteer car drivers to more organised schemes such as dial-a-ride or dial-a-bus, minibus travel for groups of people who struggle to get out on their own and community bus services where there are no existing commercial routes, such as in remote rural areas, not-for-profit services are vital to local communities.

[Dr Huq]

My hon. Friend mentioned that community transport is a lifeline for the users, but does he agree that it is also a lifeline for the volunteer drivers? Patrick O’Keefe, a constituent who was very high up at Heathrow, and Paul Hurley, who is ex-BBC, love it because they have a post-retirement second lease of life.

[Matt Rodda]

My hon. Friend makes a very valid point.

My hon. Friend the Member for Nottingham South and other Members are right to describe the services as a lifeline, as my hon. Friend the Member for Ealing Central and Acton (Dr Huq) just did. It is heartening to see so many Members here showing support for them. Throughout the debate, we have heard many examples of the impact that these vital services have in constituencies up and down the country. The value of these services is not disputed and is not a topic for this debate.

The debate came about as a result of the failure of the Department for Transport to ensure that UK legislation and guidance kept pace with community transport practice and European regulations. Sadly, the Department did not respond appropriately or quickly enough to address issues that were raised directly with them over a number of years. When officials did respond, they mismanaged the situation, causing confusion and panic in the community transport sector. We have heard that the Department’s ill-judged letter last July had an immediate and damaging knock-on effect. It led to local authorities halting commissioning and in some cases even withdrawing contracts from community transport operators. The delay of more than three months in the Department providing clarification further exacerbated the problem and highlighted the Department’s lack of understanding of the impact of its proposals on the community transport sector.

My hon. Friend the Member for Nottingham South informed us earlier that the Transport Committee’s subsequent inquiry was launched in response to the concerns that not-for-profit community minibus services for vulnerable or isolated people were under threat, and in response to Members being contacted by constituents and community transport providers. The inquiry received more than 300 submissions, which demonstrates the considerable strength of feeling among organisations that provide community transport and people using those vital services.

The inquiry found that the Government’s position—that the majority of community transport operators would not be affected by any clarification of the rules—was inaccurate. The Department’s view appears not to differentiate between true commercial services and those vital community services that fill gaps where the market is unable to deliver transport. By accepting a premise that any transaction in any form makes something commercial, the proposed changes will prevent many more community organisations from operating than the Department intended, affecting not just those that compete for contracts. It is important to remember that not all services where a payment is made are truly commercial.

If the proposed guidance stands, the total estimated impact on community organisations will be about £399 million. That will mean that many of the not-for-profit organisations will no longer be able to afford to run their services, as we have heard from many Members. That is a fundamental and worrying shift away from the established policy that not-for-profit organisations are able to play an important role, which has been supported by legislation and encouraged by both Labour and Conservative Governments for nearly 30 years. This long-established arrangement has been successful and has ensured that people in our communities can still get about when public transport cannot support them. That is why, in its inquiry report, the Transport Committee urged the Government to engage with the sector, and called for Ministers to address the Department’s lack of understanding of the community transport sector and to carry out a full impact assessment of the proposals.

A further key recommendation was that the Government use the consultation to consider reforms to achieve compatibility with EU regulations. That would maintain the key objective of continuing to provide high quality, safe and secure community transport services. It is disheartening to hear from my hon. Friend that the Government have not listened and, sadly, not engaged with these very legitimate concerns. With the consultation now closed, I hope the Minister will outline the steps he will take to ensure the views and concerns expressed are taken into account, and will reassure Members that the consultation was not merely an exercise to rubber-stamp the Department’s proposals.

The community transport sector has acted in good faith, in accordance with official guidance from both local and central Government over many years. By its own admission, the DFT has not kept pace with developments in community transport. Furthermore, the Department has taken action only when under immediate legal threat. Will the Minister now outline what steps he is taking to ensure that the Department has the expertise and understanding required to oversee the reforms, whilst ensuring the protection of these vital services? The role of the DFT is to support transport networks and to keep people moving.

This sorry episode suggests a wider failure to take a strategic view of local transport policy, which I hope the Minister will now address. I urge him to take a fresh look at community transport services, to improve services and make them more efficient. I look forward to hearing the Minister’s comments and to him reassuring the Committee on this matter.

14:45

[The Parliamentary Under-Secretary of State for Transport (Jesse Norman)]

You are an adornment to the Chair, Mr Davies, and it is a delight to see you there. I am very grateful to colleagues across the House for taking the time to take part in the debate. I recognise that the reason they do that is because of the strength of feeling of individuals across political parties on this vital sector. I am delighted to have the opportunity to respond to the questions that have been put and the Committee report that has been produced.

I will start by saying that far from it being the case that Government have not started to listen, as the hon. Member for Nottingham South (Lilian Greenwood) said, we have been very carefully listening all the way through this process. As Members were standing up, I found myself wondering how many of their specific organisations I had myself visited. They include Community Connexions in Cheltenham, the community transport business in the constituency of my hon. Friend the Member for Witney (Robert Courts) and Hackney Community Transport. My officials have visited other community transport organisations. That is because, as colleagues have said—it was put beautifully by the hon. Member for Easington (Grahame Morris) and by many other colleagues across the House—they are vital community organisations.

It was right to recognise, as several Members did, that the organisations in many ways are not entirely distinct but often highly different in their nature from purely commercial operators. That is because the services they offer are often incidental to the wider public good that they discharge and the wider social value that they add. I see this in Herefordshire: we have the city of Hereford but we also have rural lands. I acknowledge the value of community transport. That is why this Government and their predecessors have supported community transport organisations.

My right hon. Friend the Member for Derbyshire Dales (Sir Patrick McLoughlin) was right to highlight the fact that those organisations had been supported by the bus service operators grants—BSOG—and by the minibus grant scheme that we have in operation. Hundreds of organisations up and down the country have benefited from both schemes. We recognise the importance of the sector.

This consultation is, and was always designed to be, a consultation in the full sense. The Government do not have a formulated and final policy on this matter. My hon. Friend the Member for Cheltenham (Alex Chalk), who is a thoroughly distinguished lawyer in this area, pointed out—as others with legal practice experience have acknowledged—that the law in this area is a complex matter on which our understanding continues to evolve. Part of the purpose of the consultation is to understand how the law plays out in community transport organisations’ practice across the country.

[Lilian Greenwood]

I am very pleased that the Minister gave the assurance that he is listening and that he has been to visit operators. Will he explain what he intends to do in response? Will he consider alternative interpretations of that EU regulation? Is he prepared to think again in response to the results of that consultation, rather than the explanation that was given in the consultation, which seemed to take a very legalistic approach with no room for manoeuvre?

[Jesse Norman]

I will come to the full thrust of what the hon. Lady said later, but let me respond to that point. We will pursue the consultation process, reflect on the experience that comes out of that, publish a response to the consultation and take action based on that, which is exactly what Members would expect of the Government. We do not believe that we should proceed without listening to people or taking account of what they say.

This was a consultation in the full sense of the word. It was not just about listening to local community transport organisations and their wider representative organisations throughout the country, but about gathering evidence. As I think my right hon. Friend the Member for Derbyshire Dales mentioned, when he ran the Department the Government had relatively little information about this area and there was a certain lack of legal clarity. I only wish that I had his flexibility in that regard, but the point of the consultation has been to gather information as well as to take soundings from operators.

[Stephen Pound]

I understand where the Minister is coming from, but does he realise that, by not clarifying the situation, he has not given any signal of hope to the community transport sector? It is suffering, and the corrosive impact of last year’s famous letter is causing it pain. We will not have a community transport sector unless he makes it clear here and now that the Government support it.

[Jesse Norman]

I can only respect the hon. Gentleman’s astonishing capacity to manufacture indignation.

[Stephen Pound]

It wasn’t manufactured!

[Jesse Norman]

I feel the same concern as him and, if he allows me to proceed, I will be happy to give a reassurance about that. In fact, let me bring that section of my speech forward. We have said this in the past, but let me say again on the record that our judgment is that it would be premature for local authorities to withhold contracts pending further analysis and exploration of the legal complexities involved in this area. I cannot be clearer than that, and I hope that is reassuring to the sector, as it should be.

[Sandy Martin (Ipswich) (Lab)]

In which case, will the Minister write to local authorities instructing them to be helpful towards the community transport sector? The responses from local transport authorities around the country have been very variable.

[Jesse Norman]

We continue to consult local authorities. We will pursue the current consultation, which has been very full and wide-ranging, and then publish the results on that matter—properly considered and legally advised—in due course. I will say, though, that local authorities should heed the words I have just said and take a large degree of comfort from them for existing practice.

[Mr Jenkin]

Will the Minister give way very briefly?

[Jesse Norman]

I have taken a lot of interventions and I have a lot of stuff to get through, but of course—if my hon. Friend is very quick.

[Mr Jenkin]

I am most grateful. In the final analysis, the Minister’s legal advisers are there to advise; they do not instruct him. I advise him to get alternative legal advice from outside his Department, because Government legal advice tends to be a little over-cautious, which is why we finish up gold-plating these things. It is tempting just to blame the European Union.

[Jesse Norman]

Well, there were moments when colleagues sounded very much like Brexiteers in their rejection of this piece of EU legislation. There has been no undue deference to legal advice on this matter. We are considering it and consulting widely on this topic. We remain very open to legal advice. The hon. Member for Nottingham South has not clarified, in response to the question from my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), whether her Committee took legal advice. If it did, we would welcome its sharing and publishing it. I say to all colleagues around the House and to representative organisations that we would be very grateful to receive any legal advice or opinions they have. This is a matter of some legal complexity, and we are interested in hearing those views. The point was rightly made that aspects of social value in other legislation need to be taken account of, too.

I hope that it is understood that we as a Department are taking a tone of warmth towards the sector on this issue, while respecting our obligation to uphold and clarify the law. I very much offer community transport operators and colleagues reassurance about that. It is important to realise that there are genuine questions here about what the law is, how it relates to other aspects of law and how it is properly applied. We recognise that, and it is important to place that on the record, too.

Local authorities have not been much mentioned, except by me when I clarified that they should not withhold contracts until further clarification is given, but they are a very important part of this equation. As part of our further work during the follow-up to the consultation, my officials and I will talk closely with local authorities to think about best practice for how they commission services in this area and to encourage them to a proper understanding of the legal position as we see it.

In the few minutes I have left—I want to allow the hon. Member for Nottingham South a chance to respond—let me make a couple of comments on colleagues’ remarks. I think the hon. Lady is caught in a slight dilemma. She rightly praised the light-touch, affordable regime that successive Governments have adopted for the sector, which has been allowed to evolve of its own accord in a very big society way. I was grateful for the triumphant praise for the big society from the hon. Member for Ealing North (Stephen Pound). He was absolutely right about that. He did not quite bring himself to say those words, but of course that is what he was doing, like the good Tory he is. I hope he lasts in his party under those circumstances.

[Stephen Pound]

Withdraw!

[Jesse Norman]

Well, I offered my hope, but I am happy for the hon. Gentleman to contradict me if he wishes. The point is that the regime remains light-touch and affordable. That is precisely why the consultation was necessary—to gather information and understanding. It is misguided to suggest that we are adopting a narrow and legalistic approach when in fact we are proceeding with extreme care and caution in the face of a complex situation. As I said, I very much encourage the hon. Lady to place on the public record any legal advice that she has commissioned or received.

[Lilian Greenwood]

Will the Minister give way on that point?

[Jesse Norman]

The hon. Lady will have a chance to respond in about three minutes, so she can defend her position later if she wishes. I should say that I absolutely respect the Committee, which did extremely well to call this debate. That is a very important aspect of its work—it is an extension from when I was on the Treasury Committee and the Culture, Media and Sport Committee. I also have great respect for the Committee’s report, as do my colleagues across the Department.

The question of whether there has been gold-plating here is a proper one. I am not persuaded that there has been. I say to my right hon. and learned Friend the Member for Rushcliffe, and others who think there may have been, that the consultation and the draft statutory instrument went through a process of discussion across Government, including at the Regulatory Policy Committee and other committees, the purpose of which is to prevent gold-plating and which reflects custom, practice and decisions made by many Ministers, and they passed that process. I do not believe there has been gold-plating, but we do not yet have a final, evolved position on this matter, so it would be a rush to judgment to take that view.

Let me close by saying that no one respects the importance of the community transport sector more than my officials and me. We have been up and down the country to talk to these organisations. My officials have covered every part of these British Isles and, indeed, the United Kingdom in an effort to understand the sector and to support it, as the Government have historically. I give that sector, which I respect so much, my reassurance that we will continue to do whatever we can to protect and support it, subject to the process of law, in the coming months.

14:58

[Lilian Greenwood]

I am pleased that the Minister recognises the strength of feeling about this issue among Members on both sides of the House who represent constituencies urban and rural across the UK. There cannot be many issues that unite the Father of the House, the leader of the Liberal Democrats, a Conservative former Secretary of State for Transport, three Select Committee Chairs, the Scottish National party and Labour spokespeople, and so many other learned hon. Members. We know the immense value of community transport. It meets unmet need, generates social value and provides a lifeline to people who may otherwise be cut off from friends, family, work, education, social activities and essential appointments by disability or geography.

The Minister must have misunderstood our report if he thinks we recommend a legalistic approach. We ask for exactly the opposite. In our report, we called on the Government to explore whether a more practical and pragmatic interpretation of the EU regulation is possible, and that has been added to today. If he is prepared to listen, think again and amend his proposals, he has an opportunity to avert disaster. I very much hope he takes it.

Motion lapsed (Standing Order No. 10(6)).